The 22-year-old was linked with a number of clubs throughout Europe, including West Ham, Fulham, Norwich, Tottenham and Reading.
French side Sochaux and Italian side Genoa have also been linked with the Azerbaijan-born winger.
Hamad will officially join Hoffenheim in January.
“Hamad is a young, ambitious and still developing player who has shown his qualities in Sweden,” said Hoffenheim sports director Alexander Rosen.
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Summer 2016 is set to be a very exciting time for football fans, as this is when the long awaited Euro 2016 tournament kicks off.
Since Guus Hiddink arrived at the helm, Chelsea have improved considerably after a tricky start to the campaign.